Financing Debate Heats Up
  Task Force Report critizised, but consensus emerging?
  17 February 2005. The report of the WSIS Task Force on Financing Mechanisms that was published in January has drawn sharp criticism from a number of civil society groups. The CRIS Campaign has drafted an elaborated critique (not online yet), the finance caucus is working on a statement, the Swss NGO coalition has published a whole booklet with alternatives, and the German WSIS coordination group has submitted a list of concrete demands to the German government. The major finance battle has started at PrepCom2 today.

The Task Force on Financing Mechanisms (TFFM) had been set up by UNDP last summer after a decision of the Geneva WSIS summit. From the beginning, its composition lacked relevant multi-stakeholder participation, and it was not nearly as open and transparent as the Working Group on Internet Governance (WGIG). The way the Task Force was organized, it was clearly steered into a neoliberal market-only direction, we could hear from participants. The final report was due in December 2004, but was only released to the public a month ago. Because the "Group of the Friends of the Chair", the drafting committee for the final summit documents that was set up at PrepCom 1 last June, did not have enough time to seriously discuss the outcomes and recommendations, the main battle around the finance question is now taking place at PrepCom2 that has started in Geneva today.

Civil Society Critique and Positions

Civil Society groups held a public major event on financing for ICTs for Development yesterday to warm up for the PrepCom. The meeting also attracted a number of government and international organization delegates. The presentations touched on different issues like open access networks, community-driven approaches, the institutional aspects of funding and ownership of ICT infrastructures, the proposed Digital Solidarity Fund, or the link to the Millennium Development goals (MDGs). The overarching theme was a critique of the dominant market-driven model for funding for ICT infrastructures. Several case studies presented from many parts of the world showed that in many environments where the private sector has little incentives to invest, public sector funding can start successful development of the needed infrastructures and drive demand. The TFFM report in the view of many civil society groups is lacking a clear statement that questions the market-driven approach. The NGOs involved in the summit process do not oppose market approaches, and they are totally aware that private investment is important for providing infrastructures. But they want to make clear that the "market model does not rule", as Sean O'Siochru of the CRIS campaign stated.

Complementary approaches that look very promising are open access models, where the backbone infrastructures are accessible to all interested stakeholders at a minimal price, and might be run as cooperatives or funded or subsidized by local or regional authorities. The end-distribution and use then can be open to small and medium enterprises or community initiatives. These models ensure low costs, and they also have a democratic momentum, as the communities run the infrastructures themselves. So instead of asking for new global mechanisms or a one-size-fits-all solution, it is important to look at the specific use and needs of ICTs in different local environments. What is important to not be forgotten, Steve Buckley from the World Association of Community Radio Broadcasters (AMARC) reminded the participants, is that ICTs are not an end in itself, but should carefully be used and adapted to meet other needs like development.

PrepCom debates on Financing

Today afternoon, the PrepCom plenary started the general debate on the financing issue. The chairman of the WSIS Task Force on Financing Mechanism (TFFM), Shoji Nishimoto from UNDP, presented the report. Interestingly, he was very hard trying to bring the message across that the major contribution of the report was to show alternatives to the dominant market model. Many delegates, especially from Civil Society, were quite surprised, because they had perceived the TFFM report as mainly focusing on private sector funding for ICT infrastructure finance. Nishimoto referred to the idea that the market meets every need. "That is obviously not the case", he said.
Many governments, especially from Africa, still voiced criticism on the TFFM report. The delegation from Ghana explicitly accused the Task Force of not having fulfilled its mandate. It only reviewed existing financing mechanisms without considering the Digital Solidarity Fund (DSF) that had caused the whole conflict in the first phase of the summit.

The discussion afterwards went a bit smoother. The EU is certainly more open to the fund than it was before, but still said that the digital divide cannot be bridged by a single instrument, but only by a fully integrated approach that takes all existing funding mechanisms into account. The DSF is now seen as one of the existing mechanisms, as it has already been set up by an alliance of some cities and countries.

Consensus emerging on financing?

It seems that the general consensus that is emerging will look somehow like this: The market and the private sector are still an important funder of ICT infrastructures. But the needs that are not met by the market have to be met by public funding. There are a number of existing funding mechanisms that are not fully utilized, so there is a need for more coordination, information and education on how to use them better and more effectively. This has to be done by an inclusive approach, involving donors, recipients, and all stakeholders including the local communities and civil society. The suggestion of the TFFM to establish a "Virtual Financing Facility" that would pull all existing instruments together online without creating a new organization is certainly getting support from civil society, UNDP and other stakeholders.

The fact that this idea originated in the World Bank also shows that the old black and white thinking and conflict lines seem to be overcome. It will be interesting to see if the United States and the International Chamber of Commerce will want to support this line of reasoning, as they have been strong supporters of the market-driven approach in the past.

What still is an issue here, and it will be linked to the discussions around the upcoming New York summit on the Millennium Development Goals (MDGs) is the level of official development assistance (ODA). The Monterrey consensus that the developed world gives 0.7 per cent of is gross domestic product as ODA is still far from being met.

On a minor point: Some governments announced new contributions to the WSIS trust fund to finance the summit itself. The contributions ranged from 150 000 US-Dollars from France over half that much from Germany to 5000 US Dollars from Trinidad and Tobago. The Holy See currently is holding the record for the smallest contribution - 500 Swiss Francs.

Civil Society Plenary Statements on Finance, 17 February

Plenary statement by Anita Gurumurthy on behalf of the Association for Progressive Communications, Bread for All, CRIS, Instituto del Tercer Mundo (ITeM), IT for Change, the gender caucus and the Civil Society Financing Working Group, 17 February 2005

Plenary statement by Steve Buckley on behalf of the Civil Society European Caucus, 17 February 2005

(the African Caucus statement is not online yet, but we will link to it here as soon as it is available.)


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